In a post recently made by Pierre Noujeim on his blog, the popular mobile phone game Candy Crush was dissected from a business standpoint.

Many interesting points were mentioned, notably that the free app has been generating numbers 230 million USD in annual revenue and over 150 billion games played since it’s release. Many people would have the instinct to wonder how a little game can put up big corporation income statements like that. don’t worry I did too. And after some games, some searching, and some watching of Pierre playing some Candy Crush it’s become evident. An app doesn’t need to cost money to make it. The in-app purchases are where the real revenue streams are flowing. I’ve seen the game on numerous peoples phones from behind when in lecture and in commons areas around the University and with that amount of consumers to sell to, big buck purchases aren’t necessary within the app to post $230 million. Simple 50 and 99 cent add-ons are where the game has focused their sales efforts because Candy Crush and a large number of app developers everywhere know that ease of accessibility makes purchase quantity skyrocket. Candy Crush has clearly been capitalizing from extremely large amounts of small-purchase add-ons within the app when users find how easy it is to press a button and have their iTunes synced credit card handle it.

In-app play of iTunes most popular game app Candy Crush

Back by popular demand, the November 2013 release of COD: Ghosts brought enormous revenue and some insight to big brother industry.

Another year, another Call of Duty. On November 5th 2013, Acitivision saw it’s game fly off the shelves generating just under $500 milion in sales on two out of three major platforms (PS4 release coming November 22nd 2013). The famous first-person-shooter (FPS) franchise has released at least one new game each year for the past 10 years since their launch in 2003. I myself am guilty of spending one complete month (yes they have an in-game time monitor) playing my first Call of Duty game: Modern Warfare 2 in 2010. Activision has reported the new game based off the fictional operations of a U.S special task force sold to retailers before the release to rake in over $1 billion. With numbers like those I couldn’t see any reason why publishers like Activision could even help themselves from having annual releases like these. In addition, loyal customers to the series waste no time or expense making sure they get their hands on a copy of the game as soon as humanly possible despite it’s increasingly expensive price-tag (around $80 for some platforms). What interests me about this report is that it represents an industry where customers have no hesitation in buying products despite frequent releases of extremely similar products for more money. Many people criticize Apple for withholding technology from their new products in order to cash in from many different releases. What’s so different between the iPhone and Call of Duty? Now I know yes the two products are at very different price points and are targeted at different markets, but essentially their release patterns are the same. It’s a fact that companies are advancing into new technologies for their products far faster than they can turn around, test, develop, and implement them into a usable product. Due to my extensive playing of at least three different COD games, I can say with absolute conviction that there is almost no difference whatsoever between each new game. You have a gun, you vitrtally shoot the gun. Maybe maps, players, and special weapons vary but it’s significantly less of a difference than Apple product to Apple product. Nonetheless, people and articles like these are everywhere condemning Apple for their use of an intelligent business strategy.  Continue reading →

It’s my birthday tomorrow (a monday I know it sucks). I was born late relative to my class on November 18th 1995 making me 18 years old November 18th 2013. Spending my entire childhood living in Calgary where the provincial legal drinking age is 18, and moving to Vancouver where it’s 19 for my 18th birthday , as you guessed, was just bad timing. Now the sepia toned photos of all my hometown friends enjoying their first legal drink at a bar that had been invading my instagram newsfeed since the start of 2013  and the one I had been patiently waiting for will sadly have to be postponed. The thing that I don’t understand is what will change during the flight from YVR to YYC when I come home for the break. I’ll be sanctioned from even entering a liquor store at 10am then fully able to  drink however much I should so choose at 12pm. It seems awfully arbitrary to me. Now this isn’t a post which offers many diverse arguments overflowing with teenage conviction surrounding the unfairness of it all that adults can drink certain liquids that I can’t (although I’d be lying if I said I hadn’t considered such arguments). What get’s me really interested is the economics behind it all. The alcohol industry is so unique in the fact that it’s only one in a handful of markets that is strictly controlled by barriers to entry overseen by the government. It doesn’t make any sense economically how a supplier would agree to sell in a market where a significant portion is actually legally unable to purchase their product. It’s one thing to refrain from targeting a certain customer segment, but it’s another to agree that you should call the cops if a customer of this aforementioned segment (underage) purchases a product. I have come to understand now on the eve of my birthday that this economic sanction towards a demographic within an industry has made me more willing to buy than before. It’s reverse psychology, I couldn’t have something for 18 years, naturally I want to have it.

For those of you who are unaware of what snapchat is and what it does, you’ll find yourself saying “I wish I thought of that!” immediately after you understand. It made so much sense to me when someone suggested I start using an app which allows me to send pictures to my friends, but they can only see it for a time-length of my choosing where afterwards it would disappear forever never to resurface (unless someone screen-shotted). Essentially, Snapchat is an app available on iOS and Android platforms which allows user to send pictures they take themselves with drawing and text to their friends who also use the app. The catch is that the picture then disappears after x number of seconds: where x is a number between 1 and 10 chosen by the sender. The app serves to respond to the need for younger technology socialites to maintain a continuous connection with their friends through the rich communication channel of visual imagery yet simultaneously access a certain freedom of communication that comes from removing the permanency of internet communication. It’s all good fun, but what recently caught my eye was current news being reported on Snapchat’s business. The Wall Street Journal  recently reported that Snapchat had turned down a $3 billion USD offer from Facebook. Despite being in operation for only just over 2 years (initial release Sept. 2011), Snapchat has grown from a simple social media app into a massively high-evaluated business. But does that mean they’re a massive business? No. The more I use Snapchat the more I begin to understand that they really are operating on a non-existent revenue stream. The app doesn’t cost anything, and it has no ads. It’s absolutely perfect for users because they pay virtually nothing to use Snapchat, but I can’t help but wonder how the business side of the company can be worth 3 billion USD and have no clear revenue stream. Snapchat has been operating on a 65 million dollar initial investment and has therefore been able to maintain themselves with the absence of a revenue stream, but in terms of sustainability it doesn’t get worse. I think they should’ve sold out and taken the $3 billion. Facebook has money and a need to better access their younger demographic. Snapchat has nowhere to go but where they are if they continue to simply be an app and not a business.

If you know the name Rob Ford you may have it already associated with other unkind words like rude and irresponsible floating around in your mind. Now this is not to say that I believe Mr. Ford actually embodies these things. Most of the cruel accusations and names are coming hot from the nationwide media amid new information and quotes surfacing surrounding alleged drug use and sex-scandals. While all this behaviour seems to have people in uproar, I can’t help but feel interested instead of disgusted towards the situation. Mr. Ford, among many previous leaders such as corporate and national executives, has felt how easily a popular figure may be transformed so easily in the eyes of the media. I draw very odd comparisons between Rob Ford and characters like Miley Cyrus who have allowed themselves as well as us to understand how we as a society allocate our attention. Someone once said “No such thing as bad press”. If that’s the case, then I should start down the path of public embarrassment through drug-use and crude sexuality. Sadly though, I’m not a rockstar. Neither is Mr. Ford. So while I completely understand the thoughts conveyed in blog sites such as these (insert warning for R-rated blog), the real insights lie behind understanding that it’s not necessarily Mr. Fords actions that are so horrific, because we’ve all seen what rock and roll is all about. It’s that he’s trying to rock and roll being the democratically elected representative of a municipal district.

For those of us who are heavily invested in of of the most recognized social media platforms which differentiates itself by allowing users to post photos instead of words (Instagram), #rkoi has been popping up on news feeds everywhere. RKOI, or rich kids of instagram, unites photos on a tumblr feed  of teenagers and young adults who are the sons and daughters of the %1 spending 5 digits on restaurant bills, jet-setting on a private charter, and popping $10,000 Moet champagne bottles in St. Tropez. For many, the rich kids of instagram offer an exclusive look into how the heirs of the rich and elite conduct themselves day to day. The accounts have drawn massive amounts of attention nation-wide and has opened discussion to the security threats these teens may pose to their parents. Forbes reported in an article on their site  that Michael Dell immediately suspended his daughters account when he learned that she was disclosing information on her and her families whereabouts to anyone who follows her on the social media platform. Mr. Dell reportedly spends approximately $1 Million USD annually on security for himself and his close family, so a picture disclosing a flight or hotel can do serious damage against his efforts. Aside from the risk the youth pose against their personal safety, the amount of attention they’ve received from people criticizing the exorbitant sums of money spent on shopping and super-cars has caused uproar. Nothing is stopping the teens from expressing themselves however they choose to do so, but the fact that they take pride in demonstrating evidence of their copious amounts of consuming in the face of a public already feeling unfairly treated can’t help.

One of the ways in which Apple has differentiated themselves from many other competitors within the exponentially expanding tech industry is through their ability to innovate, or rather convince customers they are innovating. In either case, the company with the worlds largest market-cap as of October 2013 had been rumoured to be continuing on this path of expansion into unknown uses of rapidly advancing technology in developing a wearable smart watch. The general idea would be for consumers to purchase the watch in compliment to their iPhones and gain some utility by wearing Apple product. By Forbes predictions (1), the first-of-its-kind product could add relatively mild increases to Apple’s annual revenue at the pace they’re carrying. What many analysts predicted was that the actual business of the product jumped to a position less important than the social implications of the product itself. Google’s wearable smart glasses are namely recognized as one of the first major introductions of innovation into the market of wearable smart technology, being a fully functional camera, recorder, calendar, alarm clock, …etc that consumers may see through like eyewear. The interest around these and similar products is less focused on the technology, which all exists and has been nearly perfected on most smart phone platforms, and more on the social implications of integrating technology into what we wear. It’s a market that has never really caught our attention or interest, and the fact that the industry-leading giants are investing resources into venture opportunities like these may mean big change is on the way.

(1) http://www.forbes.com/sites/connieguglielmo/2013/10/07/catching-up-with-apple-analysts-iwatch-wont-be-a-needle-mover-not-enough-wealthy-people-left-to-buy-iphones-larger-screen-iphone-6-could-lift-shares-to-600/

(2) http://www.forbes.com/sites/connieguglielmo/2013/03/19/whats-the-iwatch-worth-to-apple-a-lot-more-than-you-may-think/

CBC “Trader Joe’s loses fight with Vancouver’s Pirate Joe’s”

I learned the name Michael Hallatt first when he was introduced to me before commencing his address to Sauder’s class of 2017 during Frosh. One of the first points he had intended to make, was that his name was Michael Hallat, and he was being sued. He was outspoken, energetic, and came across as totally self-confident and rebellious. The business model he presented was one that I found extremely strange. Drive to the states, buy products from Trader Joe’s, drive back and resell them in Canada at his comedically-named “Pirate Joe’s” store in Kitsilano.  Why and how on earth did someone decide to start crossing the U.S.-Canada border to purchase another companies products if only to return and sell at a mark-up back home? I found it strange and seemingly illegal until he reinforced so convincingly that international laws protect himself and his business from any legal action imposed by Trader Joe’s. All the details of Michael Hallat and his speech to us returned to me upon a ruling this week by United States Judge Marsha Pechman which dismissed the case of Trader Joe’s vs. Michael Hallat citing the inutility of American laws to prosecute infringements in Canadian jurisdiction. Trader Joe’s could not prove any evidence of economic harm imposed by Pirate Joe’s and was therefore forced to appeal. The statement Michael Hallat made early friday morning reinforced the utmost confidence he had in himself and his business; a quality detected very easily by many Sauder froshees. 

http://www.cbc.ca/news/canada/british-columbia/trader-joe-s-loses-fight-with-vancouver-s-pirate-joe-s-1.1912400

The new iPhone 5C Apple announced during a keynote presentation earlier Tuesday September 10th.

The new iPhone 5C Apple announced tuesday morning marks the first dual-release of two different  iPhone hardware concepts together in one keynote. The new 5C offers customers a less-expensive option (599$ as compared to 719$) (4) in exchange for a less advanced product. The iPhone brand has always been one of utmost exclusivity offering a heightened level of functionality to those who maintain a certain lifestyle and income. Nonetheless, the famous Apple smartphone has been around since June 29th 2007 (1) and has remained a fierce competitor in the relatively new market. The iPhone 5 had just finished 2012’s final quarter dominating Samsung’s S3 with 27.4 millions units shipped (2) and a 12.6% market share (3). If the iPhone can remain the be the worlds best selling smartphone at approximately 699$ CAN, then why does Apple feel the need to offer a less-expensive option? Well it could be new research, or it could be a new design for a price skimming strategy. Apple had been a target for scrutiny concerning business ethics when they cut $200 from their iPhone price 66 days after it’s release in 2007 (5). Perhaps this new product launch could be fantastic new way to wrap-up and checkout the hardcore iPhone lovers and the lets-wait-for-the-price-drop consumers in one neat colourful package.

(1) http://en.wikipedia.org/wiki/IPhone

(2) (3) http://www.zdnet.com/apples-iphone-5-overtakes-samsung-as-best-selling-smartphone-in-q4-2012-7000011547/

(4) http://www.apple.ca/iphone

(5)http://marketingathpu.wordpress.com/2010/04/10/apple%E2%80%99s-pricing-strategy-for-the-classic-iphone/